Guinness Nigeria’s share price closed at N54.80 on Monday, up approximately 8.41% from its opening value of N50.55.
This follows the earlier report of the acquisition of over 50 per cent shares of Guinness Nigeria, by Tolaram, according to Nairametrics.
Ambusiness had earlier disclosed that Tolaram would buy Diageo’s 58.02% share of Guinness Nigeria and set up long-term royalties and licensing contracts for the company to continue producing the Guinness brand.
The company will also receive a license to use Diageo’s mainstream and ready-to-drink brands that are produced locally.
Upon observing the trading window, it is evident that investors are placing significant purchasing pressure on Guinness Nigeria equities. 178,098 trades with a turnover value of N9.8 million were made during the trading session.
This year, Guinness Nigeria has seen sharp reductions, much like other breweries listed on the NGX. Guinness Nigeria, whose share price began the year at N66, has experienced a decrease of 23.4% year-to-date.
These corporations’ enormous losses are connected to the dismal performance of these stocks this year.
International Breweries posted a pre-tax loss of N97.3 billion in FY 2023, and for Nigerian Breweries, the group posted a pre-tax loss of N144.7 billion in FY 2023.
These companies’ huge losses can be attributed to the Naira’s dramatic devaluation in 2023 as well as growing operating costs brought on by historically high inflation rates.
Due to the large losses these companies have disclosed, which have resulted in accumulating retained losses, stockholders may not receive dividend payments in the upcoming years.
Nigerian Breweries seeks to commence a rights offering program valued at N600 billion to pay off some of its current liabilities and trade payables.
International Breweries plans to raise capital as it nears the end of its N588 billion rights offering.
Guinness Nigeria’s circumstances are unique. Diageo International is opting to leave Guinness Nigeria, while parent companies of other breweries, like AB InBev for International Breweries Plc and Heineken NV for Nigerian Breweries Plc, are showing confidence in their subsidiaries through capital infusions via rights issues and debt-to-equity conversions.
